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Government and Economy

Basic Income and Universal Income Security

Kosuke Okabe Ph.D.
Associate Professor, Faculty of Letters, Arts and Sciences, Waseda University

Basic Income (BI) is an unconditional, uniform, and ongoing individual unit of income security (cash benefit). While the term can be rendered using Chinese characters for the words “basic” and “income” or “dividend,” it is becoming the norm to use Katakana, one of the Japanese syllabaries, to translate it. Many people have come to know this word through its use by the mass media and in the manifesto of the New Party Nippon.

The notion of “unconditional cash transfer” is the most enticing yet criticized feature of considering basic income as a new form of social security service. There are no unconditional benefits within the current social security system in Japan. National pensions, for example, are “individual, ongoing cash benefits” which stipulate age and are dependent on the receipt of pension premium payments, while a strict means test (examination of assets) is imposed with regard to welfare benefits. Further, there are conditions for the receipt of the so-called social allowance for single parents and the disabled, with many restrictions on household income. With no income restrictions but the presence of a limit to infants of junior high school age or below, the much-debated child allowance is not an unconditional benefit for everyone.

From the point of view of providing an “unconditional, uniform, and individual cash benefit” the once-notorious fixed benefits come closest to ”Basic Income.” However, the big difference between the two is that the fixed amount of benefits represents a one-off measure aimed at boosting the economy, while Basic Income is a security income enabling continuing benefits. According to some critics, the payouts range from 50-80,000 yen up to 150,000 yen or more per month, with places where the amount of supposed benefit is sizeable.

Researchers and activists in Europe concerned about Basic Income established BIEN - Basic Income European Network (now operating under the reformed name, Basic Income Earth Network) in 1986, with a long history of debate and activity. It suddenly came under the spotlight in Japan around the middle of the previous decade during the advance of globalism as it became impossible to ignore the apparent widening income disparity and increase in the numbers of people with irregular employment. This may be a natural consequence of a growth in concern for a universal income security system for people who are not covered under the screened income security which restricts social public assistance to the disabled and the elderly, in an environment where the working poor have become commonplace.

However, with regard to this heightened interest in recent years, many social security or labor economics experts are of the view that while it has been shown that there is an understanding of the concept, institutionalization is some way off. In other words, it is commonly argued that: although there is a problem with society becoming too unequal, in order to provide all the people with a substantial basic income, huge contributions are required, and this is unrealistic. Moreover, unconditional income security heightens the concern of increasing dependency on welfare. Thus the problem should be solved through workfare and activation (*) which impose obligatory vocational training upon the receipt of capital benefits over a limited period.

Moreover, many social activists who have tackled the problem of poverty and those challenged to deal with their own income security problems are skeptical about basic income. What underlies this skepticism is not so much an emotional opposition to providing unconditional benefits to those who can work and are wealthy, but rather turning away from the poverty problem that truly must be addressed—evoking a sense of caution that the existing welfare and social allowance screened income security system will shrink or be replaced by universal security income.

On the other hand, the macro policy situation is such that the basic structure of the social security of Japan—which has relied on a system of pension insurance and a framework of family and company—faces a major turning point, indicating a rise in expectations toward the concept and policy of unprecedented redistribution of income. While there were many complications, the uniform child allowance (without restrictions on income) was instituted and a minimum security pension for elderly people remained part of the Democratic Party manifesto in the elections to the upper house. However, there is a need to be mindful that the generation from the lost decade not be left behind by this framework again. It is necessary to offer up some words on behalf of those whose interests are (yet to be) vested and who, with regard to social security, feel an increasingly strong desire for basic income.

Although consumption tax, income tax, inheritance tax and corporation tax should be relaxed at times, originally limits on the range of social security needed to secure revenues implicitly for elderly-centered services such as pensions, medical treatment, and nursing care did not have the pros and cons debated. The sudden emergence of debate on the introduction of benefits with tax exemptions is little more than a measure against an increased consumption tax. At the very least, the vision of universal income security which includes payments to the working poor is lacking at the moment.

As a backdrop to these times, I think the key to the welfare state getting past the barriers to realize minimal state (re)distribution and free equality is destined to be found in Basic Income. This is why discussion concerning child assistance, social security pension, and benefits with tax exemptions is a litmus test and a preparatory step. Moreover, if reductions on the currently screened income security provisions such as public assistance and disability pension are not stopped, universal income security will lose its foothold. This significant thought experiment is now extending into real action but the reverse is also a distinct possibility.

(*) Workfare and Activation Although both are social policies linked to social security and labor, Activation aims to support working through public services, such as daycare facilities and vocational training, whereas Workfare posits that public assistance should be performed in return for labor.

Reference

The Direct Payment and Basic Income web page

Kosuke Okabe Ph.D.
Associate Professor, Faculty of Letters, Arts and Sciences, Waseda University

[Profile]
Kosuke Okabe graduated with an undergraduate degree from the department of sociology of the Faculty of Letters at the University of Tokyo and completed his doctorate at the graduate School of Social Sciences at Tokyo Metropolitan University. He specializes in the disciplines of social welfare and welfare sociology. He is interested in disability studies, personal assistance, and direct payment—a new kind of welfare which clears away the barriers obstructing the relation between people and society. He is a member of the General Welfare Committee of the Council for Disability Policy Reform. He is the father of an intellectually challenged (autistic) child.
His major works include The Services and Support for Persons with Disabilities Act and Self-Reliant Care - Personal Assistance and Direct Payment (Akashi Shoten Co., Ltd - 2006); Welfare Policy After the Services and Supports for Persons with Disabilities Act - Self-Reliance for the Intellectually Challenged (recently published, Akashi Shoten Co., Ltd); Good Support? - Independent Living and Support for the Intellectually Disabled and Autistic(Co-authored, Seikatsushoin Co., Ltd - 2008); Care - Thought and Practice 3; Being Looked After (co-authored, Iwanami Shoten Publishers - 2008) and Convention on the Rights of Persons with Disabilities - An Outline (co-authored, Horitsu Bunka Sha - 2010).